Obama trashes trickle-down economics
April 3rd, 2012
03:39 PM ET

Obama trashes trickle-down economics

NEW YORK (CNNMoney) - President Obama thoroughly denounced the budget plan favored by House Republicans on Tuesday, calling it "thinly veiled social Darwinism" that will only exacerbate income inequality in America.

The president's address, delivered to the American Society of Newspaper Editors, also marked the first time that he has called out Mitt Romney, his likely challenger, by name.

That passing reference, in which Obama linked the former governor of Massachusetts to the budget written by Rep. Paul Ryan and adopted by his House colleagues, marks an opening volley in a bitter campaign that will stretch until November.

FULL STORY

Topics: 2012 Election • Economy

soundoff (45 Responses)
  1. C Williams

    A History Lesson of trickledown economics.
    At the beginning of the 20th century the country had 3 Presidents that had been members of the progressive movement. Theodore Roosevelt – 1901-1909, William Howard Taft – 1909- 1913, Woodrow Wilson – 1913 – 1921, while Roosevelt and Taft where Republicans, Wilson was a Democrat. While much needed consumer based legislation was passed during this time, the size and cost of Government had gotten out of hand, along with a crippling debt brought on by the World War. In 1921 Warren G. Harding was elected to the Presidency and was the first conservative in 21 years. Harding came to office with a National debt that was 20 times the prewar total and Government expenditures which had grown 4 times larger in 6 years, and personal incomes at their lowest point in 30 years. Harding had a basic conviction that the high income tax on corporations and individuals discouraged venture capital and undermined productive enterprise. He proposed a lowering of all taxes, the Democrats where in immediate opposition; they wanted more taxes to pay for the debt, in the end Harding prevailed. He banned the excess profit and wartime excise tax, lowered the corporation taxes, the surcharge taxes on incomes, and lowered personal income taxes. In just a few years the debt had been reduced to a third of what it was, while the tax rate reductions saw a rise in industrial profits, along with a sharp rise in personal spending. With a return of Government expenditures near their 1914 levels and rising revenue collections, the country was back on the road to prosperity.

    I personally ask Democrats to fix these three things just these for now.
    Obama care (now costing TWICE AS MUCH as we were told it would),
    $5 TRILLION in DEBT first term of 0bama
    Failure to enforce Federal immigration laws at a cost of a whopping,
    $338.3 BILLION DOLLARS A YEAR to this country.

    Thank you. In advance

    April 3, 2012 at 3:53 pm |
    • Sponge-Bob

      Another thing Harding/Coolidge inherited was 20% unemployment and high inflation. Things turned around almost immediately compared to today. One other thing they did which no one mentions was to raise tariffs, protecting US manufacturers. It's no wonder there was such a huge boom in the 20's.

      April 3, 2012 at 6:12 pm |
      • jean2009

        Even so if you look at the numbers together Coolidge and Hoover had 10 years. The 6 years Coolidge was in office from 1923 to 1929 (he finished Harding's term when Harding died and then had a term of his own) add the 4 years Hoover was in office from 1929-1933. So effectively there were Harding (1921-1923), Coolidge (1923-1929) and Hoover(1929-1933) a total of 14 years for those 3 supply economic dunces to put the economy in the ditch with their voodoo economics.

        Or, as you are implying these Repuke miracle workers couldn't turn the economy around in 14 years?

        Since you seem to always want it both ways....which is it?
        My guess is both since they caused the mess and then couldn't correct it with more of the same.

        April 4, 2012 at 9:34 am |
      • Pete

        @Jean,12 years for the turn around and Roosevelts policies helped turn the tide, where the republicans just sank it deeper with their idiocy.Bush same way,Pres Obama just over 3years,more of a population,more corporate deregulation,no more import tariffs.Has a party of NO that's fights every step ala Mitch McConnell,so tell us how with people not respecting our POTUS are we supposed to get this done effectively.It would never happen in Roosevelts day,McCONNELL would be shot for treason,not slapped on his back by rightwind obstructionist trying to derail an resurging economy, they're playing political roulette with our country,if they don't like it republicans get off the ride...

        April 5, 2012 at 10:45 pm |
    • Meg

      You have got to be kidding – right?

      Harding was president for only two years, 1921-1923 (I think) and he was followed by his VP Coolidge as president up until 1929 –

      You do realize you are describing the years that lead up to the Sock Market Crash of 1929 and the Great Depression – right?

      Interesting how these Republicans you mention presided over a time that was very similar to this most recent crash. Income inequalities were also at a hight then as well. Also, just like the lead up to this current crash, most of the growth you are describing was due to excessive credit and lending for buying stocks in a fairly unregulated market that people were certain would never go down in price – sound familiar? The same bubble/credit fueled conditions that existed for our recent housing bubble and crash –

      And you are saying this is what we need more of? I think not.

      After the second world war (since you describe the first) taxes remained higher and so did spending than they had been during the depression years and also during the years you had descried, the debt from the second war was astronomically higher as well, but we paid it down with a booming economy fueled by government contracts, retooled factories and industry from our war efforts and from higher taxes too – in addition new regulations kept us safe and prosperous until more recent attempts at deregulation that began under Reagan (S&L crisis, etc)

      I do not know why you point to the period of history you do. It is like pointing back to the Bush years – there was credit card and debt fueled prosperity then, just like Bush's and a resulting bubble in under-regulated free-markets – just like Bush's (and Reagan's S&L crisis)

      It is amazing what bizarre cherry-picking some will go to to try to justify trickle-down – it does not work – history simply always proves this

      April 3, 2012 at 6:46 pm |
    • Dan5404

      And the hero of trickle down economics, Ronald Reagan. still holds the record for greatest percentage increasse in the national debt, despite raising taxes 11 times.

      April 3, 2012 at 10:37 pm |
    • jean2009

      Hello.... you do know until George W. Bush Warren G. Harding is considered the worst president in our history. Harding, Coolidge, Hoover (1921-1933) all GOP trickle-down policy wonks. Fourteen years that put us into the great depression of 1929.

      April 4, 2012 at 9:46 am |
      • rightytighty

        Hello.... you do know until Obama, George W. Bush was considered the worst president in our history.

        April 4, 2012 at 10:21 am |
      • rightytighty

        And your grandchildren and grandchildren's children are really going to despise him..

        April 4, 2012 at 10:24 am |
      • jean2009

        George W. Bush definitely is the worst current president.

        April 4, 2012 at 6:37 pm |
  2. Durundal

    C Williams, what you seem to be ignoring is something called the Laffer curve. With it you have only managed a partial justification of how simplified tax codes encourage more citizens to avoid dodging out on paying taxes by offering lower rates (and at the time a more simplified tax code). Like everything you have run the risk of oversimplifying reality to then try to use it to whitewash every thing you see with it. REASONABLE politicians understand that like everything there is an implied elasticity to change which will produce a diminishing returns to scale for associated legislation and tax code. Along with this are associated logistics, compliance costs, and a host of other factors that dictate 1) if the code is of benefit, 2) if implementation of the code is practical 3) the unintended/intended impacts of the code upon the populace.

    As for your little rant at the end:
    1) 'Obamacare' as you term it has not even come into effect, there are actually minimal 'impacts' thus far, although there are plenty of speculative investors running rampant in the market right now with a million 'hunches'
    2) During times of and and/or depression deficit spending has always occurred. It doesnt matter if theres a silly little [R] or [D] in front of a person's name. Just like both parties have historically used a combination of tax writeoffs and public works projects to try to stimulate the economy.....just like our president has done
    3) This president has enforced immigration to a greater extent than at least the last 3-4 presidents. Deportations have risen greatly, with the majority of deportations being focused towards illegal smugglers,and REAL criminals (not your cheap migrant workers). In addition, federal studies have concluded that the illegal workers are a net benefit for the country, on average generating more GDP than being consumed as services. It is convenient to blame strange denominations and outsiders, but I would post that the real problem is our underachieving, anti-intellectual citizens.

    April 3, 2012 at 4:36 pm |
  3. d

    Mr Pez, Mr Personality the Bean Counter is already plannin on helpin his filthy rich Nascar & NFL owners by slashing the comparable 13.8 % Mitt pays in taxes. Yea I said it Its 100% true. They got tax llopholes for miles. This MARVELOUS man is pondering on ways to hurt the Elderly & middle class in order to help the Rich, Richer & Richest. It is SEVERLY sickening to 99 % of America. And as far as the Repressing of votes, Especially in Swingstates like FL & Ohio he will stop at nothing to cheat the elderly & minorities to stop their vote. Its called Comunism, yea I said it. Its what they do in Iran & China & Syria. This great Country will go 50 years backward if Mr Personality & the GOP suceed in this. These guys on the right are as visious & UN- American as you can get. Can a brother pull all D s all up in this election in Nov? Yea & every workin man & woman & union member & Elderly & minority & Hispanic & College kid is gonna get all up in that D pullin thing also. God Bless America & the Workin Men & Woman. Lets take these Rich , Richer & Richest & Gloom & Doom Romney & Ryan down come Nov.

    April 3, 2012 at 4:42 pm |
    • John

      Billions down the toilet for green companies and you try to trash people who actually work and earn THEIR OWN MONEY?
      Dem are in full campaign mode. BO has no record to run on. All he has is class warfare. Dems, until your side proposes and passes a budget in the Senate none of the trash you talk means anything.

      April 4, 2012 at 7:58 am |
  4. d

    Yo, what up with me gettin all up in this blog in 2 seconds & you guys Censoring me with 35% & of the other ones? I am not complainin, however I be all wonderin. Its like when I read about George Romney runnin for Prez while he was all up in that mexican mormon teritory. A man cant run for the highest office when born outside American soil. What up with that? how did George do this???

    April 3, 2012 at 4:47 pm |
  5. d

    Sorry Mr Prez, my bad. MR PREZ, not pez.

    April 3, 2012 at 4:48 pm |
  6. Former republican

    The pres is correct and the trickle down only does one thing and its screw the working poor and middleclass.Keep it up Mr. pres the middle class and seniors need all the help they can get without congresses help.Hopefully we can get a new congress that will work with you on your next term so we can get the middle class going again.

    April 3, 2012 at 4:58 pm |
    • John

      Looks like you bought into the new Dem plan. They have gone from hope and change to BS and Bash.

      April 4, 2012 at 8:26 am |
      • Pete

        Zip it dirtbag....

        April 5, 2012 at 11:05 pm |
  7. BLKMANnAmerica

    GOOD because all it is TRASH and has never worked in America, just take a good look at the history.

    April 3, 2012 at 4:59 pm |
  8. d

    Yo, these guys dundel & C williams GOTTA be tabby nackles. every Lds has a tremendous long song & dance ten paragraph that is as robotic as Mr Personality. I am tellin ya the got no soul. Why cant they just talk from the heart. They are so brainedwashed it aint funny. & cotrary to popular belief, they aint nice people. When I was in Hurricane, specifically Coral Canyon, I seen the damnnest thing. 12 year olds building homes with grown 50 something & 60 something supervisors. Come to find out, it was the FLDS PLYGS, Yea the ones who RAPE & selloff 12 & 13 year old girls to other Old 50 & 60 something Old Plygs. I am not makin this stuff up. They even built the qute WARD, at least thats what mormons call it. Imagine that. The LDS people SUPORTING these SICKOS ecomomy. This blew my mind. They Tabby nackle not only turn theur heads but the WELCOME their Homebuiling!! Again I am not makin this stuff up. Thousands of letters were sent to Huntsman & he even turned his head. Boy their is a true American. This is all 100 %

    April 3, 2012 at 5:01 pm |
  9. jean2009

    Seriously, the short and sweet of the trickle-down supply-side voodoo-economic theory of running this country (give it to the rich and let it trickle down) is that it has been tried 4 times (Coolidge, Hoover, Reagan, and Bush II) and each time it has been an epic failure ending with a massive meltdown of middle class jobs.

    It was Coolidge1923-1929 and Hoover (1929-1933) that brought about the 1929 stock market crash.
    Reagan's 1982 depression, and George W. Bush's 2008 depression.

    We hear fools who seem to think it is not okay to bail out businesses which provide jobs for millions like the auto industry, but who fully approve of bail outs on a massive scale by subsidizing big oil and arm-chair farmers who have no intention of farming...those subsidies produce nothing other than a glut of welfare for the already well-heeled.

    April 3, 2012 at 5:30 pm |
  10. BigTBone

    What's more embarrassing that this president has to tell America, again, that trickle down doesn't work.

    The wealthy had a chance to actually be "job creators" last fall when he proposed his plan to rebuild infrastructure under the jobs act, but that proposal fell on deaf republican ears. That entire program would have been paid for by taxes on high earners, but it never received the serious investment it needed.

    Bottom line, if your family makes more than 250K/yr in this country, you're doing quite well. If you do that for five years, you've earned over a million. If you make 50K/yr, it takes 20 years to earn 1M. I have no problem climbing a ladder. I just wish the GOP would quit greasing the rungs...

    April 3, 2012 at 6:11 pm |
    • Sponge-Bob

      Are you claiming a Republican prevented you from moving up to a better job? Maybe you need to broaden your skill set or get more education?

      April 3, 2012 at 6:18 pm |
      • jean2009

        I assume you are looking in a mirror.

        April 4, 2012 at 9:19 am |
    • John

      BO's policies are not working and he wants to get reelected and people lke you ignore the mess he has created. It will take years to recover from the messes he has caused. To top it all off he, and his administration (i.e. Carney, Axelrod, etc.) are becoming more and more arrogant in recent days. These clowns have choosen not to force a budget to be created so they can continue to spend and spend. Another 2+ billion for a failed green energy company yesterday. They bash Romney and other rich people for the money they earn then they waste billions of OUR MONEY!!.
      Bottom line, until these dems can put together a budget and get it passed by the Senate, which they should be able to do easily given their majority, they need to keep their mouths shut.

      April 4, 2012 at 6:55 am |
    • John

      If you are earning over 250K where? NY? Cali? How long have they earned $250K? 1 year? 10 years?
      A family who owns a small business making 250K could be virtually nothing depending on how the business is doing. You make a blanket statement with not boundries and say it is fact. You obviously do not have a clue when it comes to money.
      You dems and your class warfare are bringing down this country. When 50% of the population needs to take care of the other 50% – and the 50% who are being taken cared of want more and more for doing nothing we have a major problem.

      April 4, 2012 at 7:02 am |
  11. jon

    Israel is a proven terrorist state, that has carried out aggressive actions against their own allies, not to mention innocent civillians.

    White phosphorous...

    Bomblets in lebannon..

    And AIPACS enourmous influence in American politics.

    That is the face of true terrorism.

    April 3, 2012 at 6:15 pm |
    • John

      Clown. Racist.

      April 4, 2012 at 7:03 am |
    • Lizzie

      Why are you throwing Israel into mix, maybe you should inform yourself first, before you spout off, shows you have no clue.

      April 4, 2012 at 10:37 am |
  12. JohnB

    As a Leftist, I can say that Obama is only left-leaning in rhetoric. His policies are very similar to Bush's. I'm truly embarrassed that I bought his "change." Nevertheless, I will vote for him in 2012 because I can vote for the center-right candidate (Obama) or the far-right (Romney), and hopefully not a fascist (Santorum).

    April 3, 2012 at 6:30 pm |
  13. More CampaignRhetoric

    Obama doesn't know what "trickle-down" economics is, just as he doesn't know what "judicial activism" is.

    April 3, 2012 at 6:45 pm |
  14. Debbie

    Trickle down didn't work for Reagan or GWBush but the GOP keeps trying the same thing over and over and over.

    April 3, 2012 at 7:45 pm |
    • jean2009

      And it didn't work for Coolidge and Hoover either but the rich no jobs creators keep trying to sell that baloney to the fools on the right.

      April 4, 2012 at 9:18 am |
      • Lizzie

        Is this the best Media Matters and moveon.org can do today. Maybe if you would get your head out of your a... and think for yourself, go to the store once in a while and see how Pres.Obamas policies have helped the middle class.

        April 4, 2012 at 10:40 am |
      • jean2009

        Really I was in a store this afternoon.
        Obama-Biden 2012

        April 4, 2012 at 6:41 pm |
  15. scott

    One of the highly developed talents of President Barack Obama is the ability to say things that are demonstrably false, and make them sound not only plausible but inspiring.

    April 4, 2012 at 5:01 am |
    • jean2009

      Things only sound inspiring when they actually are truth...which is what the president provides.

      April 4, 2012 at 9:40 am |
      • Lizzie

        Truth, you got to be kidding.

        April 4, 2012 at 10:32 am |
  16. BLKMANnAmerica

    The level of "just plan CRAZY" continues to rise with the sorry repuks. They have nothing to offer America so they just keep sheving the BS and call it "rosies"................................they (repuks) need to move from the banks of DENIAL.

    April 4, 2012 at 9:14 am |
  17. Ray E. (Georgia)

    After 75 years of Big Social/Democrat Programs why is anyone even talking about Trickle Down economics? Everything should have been fixed by now! What happened? While it may be an awaking for some of you, Trickle Down Economics is the only economics there is. If there was any other kind the Democrats would have discovere it by now. And, as suprising as it is to some of you, they tried to get everybody in a house! You see how that worked out! But, some of you can't see the forest for the trees! P.T. Barnum was right.

    April 4, 2012 at 9:55 am |
  18. jean2009

    I look at the Repukes of today, and see Harding and the Teapot Dome scandal all over again. Today they are screaming about the teapotty and pipelines all over again.

    http://www.usnews.com/news/history/articles/2007/02/16/worst-presidents-warren-harding

    http://www.mc.cc.md.us/Departments/hpolscrv/jzeck.html

    April 4, 2012 at 9:56 am |
  19. rightytighty

    Meanwhile.., in todays modern world.
    The government continues to loss jobs while the private sector can only manage a poultry few. "Tthe new normal", as some like to say now.. A full six years after the progressives swept into control of congress to only produced our current great-recession.

    April 4, 2012 at 10:20 am |
    • jean2009

      It took George W. Bush's 8 years of failed trickle down polices to create this mess just like the one created by Harding, Coolidge, and Hoover in 14 years. It took 20 years to start to recover from Reagan's policies. I think the president has done a very good job considering how much George W. Bush's mismanagement harmed the country.

      April 4, 2012 at 6:46 pm |
  20. Pete

    The president is right,Ryans proposed plan calls for tax cuts for the 1% ,from a base 35% reduced to 25% a 10% cut.He also is hitting hard on Medicare,Medicaid,starting with the voucher system for Medicare.His proposal is like giving a $9,000 credit for health care and everything above it ,the voucher holder pays.Medicaid will reduce grants,cutting critical services needed to maintain proper health in Medicaid patients lives.Romney stands behind Ryans bill,giving this arrogent policymaker political leverage as the budget wars are starting up again on capital hill.Also don't be so surprised if this pompas arse Romney picks Ryan as his vp,running mate.Romney needs someone with policymaking experience,so he'll be the chosen one.But its at a price,Ryans not liked in his native state Wisconsin,where his boy Walker is about to be recalled.Both are expected to loose,nothing new here.

    April 5, 2012 at 9:33 pm |
  21. You've

    Terrific Web site, Carry on the wonderful job. Thanks a lot.

    May 30, 2012 at 12:48 pm |